The doctrinaire decision to can the Future Jobs Fund

The House of Commons Work and Pensions Committee report on Youth Unemployment and the Future Jobs Fund highlights two facts that are very embarrassing for the government: the decision to abolish was made before there was any evidence to justify it and the decision was rushed through, leaving young unemployed people without adequate support.

Young people have been particularly hard hit by the recession. At the start of the recession, the unemployment rate for 18 – 24 year olds was 11.9 per cent. This was much higher than the 5.2 per cent for the population generally, but since then their rate has risen much higher – it now stands at 17.6 per cent, compared to 7.9 per cent for the population generally.

Long-term youth unemployment is especially worrying. The number of 18 – 24 year olds who have been unemployed for over a year (198 thousand) is nearly double the figure at the start of the recession (106 thousand in Mar – May 2008).

That is why the TUC was such a strong supporter of the Future Jobs Fund, which created a job for any young unemployed person who wanted it and had been unemployed over 6 months. This explains why we were so upset about the abolition of the programme. Even so, we had never claimed that the programme was a success – it was far too early to say. The FJF had only been running for eight months, and it had been a bit slow to get started, so most of the organisations offering places had only been recruiting for four or five months.

The latest statistics show over 50,000 people FJF jobs by July, despite the cancellation. Even so, there are no evaluation results yet and it simply isn’t possible yet to say whether it worked or not. Which is why we were surprised when the government announced in May that it was being abolished because it was “ineffective” – how could they know?

And the Select Committee essentially agrees with us:

A robust evaluation of the FJF has yet to be undertaken. While we accept the Government’s need to make savings to address the public spending deficit, it is our view that insufficient information was available to allow the Department to make a decision to terminate the FJF if this decision was based on its relative cost-effectiveness. It is important that DWP carries out cost comparisons for welfare-to-work programmes on a like-for-like basis. In particular, statistics should clearly show what payments, including benefit payments, individuals on each programme are receiving, to reflect the full cost to government.

Even more worrying is the confirmation of many people’s suspicions that the FJF was cut without anything else being put in its place. The Work Programme will replace the existing provision, but it isn’t specifically designed for young people and in some places it won’t be in place until 18 months after the cancellation of the Future Jobs Fund. Given the priority youth unemployment should have this is hard to credit. Again, the select committee is worth quoting at length:

We are concerned that the transitional arrangements between FJF ending and the Work Programme being fully established will mean that young people are not offered targeted employment programmes for some time. It has been demonstrated that periods of unemployment are detrimental to young people’s future prospects and that the longer the period out of work, the more serious the damage to their job prospects. The cancellation of the FJF has also coincided with increased levels of unemployment amongst young people. It is therefore essential that addressing youth unemployment is given appropriate prominence within the Government’s welfare-to-work policies. We intend to pursue the issue of the continuation of provision in our Work Programme inquiry .

The Work Programme increasingly looks like an attempt to run employment provision as cheaply as possible, I wish I were as confident as ministers that it will be an improvement.

Written by Richard Exell

I am the TUC’s Senior Policy Officer covering social security, tax credits and labour market issues, including the debates about the European social model and labour market flexibility. I also represent the TUC on the Industrial Injuries Advisory C…